Youthful, enthusiastic and unconventional, Virgin Direct is unusual among financial services companies. Launched only four years ago, the Norwich-based company embodies Virgin brand values and avoids the bureaucratic baggage that weighs down many of its larger, more established rivals. In an industry heavy with tradition and convention, Virgin Direct had the opportunity to make a fresh start.
The impetus for Virgin Direct came from group chief executive Rowan Gormley, who had been looking to buy some financial products and had failed to find any with small print he could understand or that suited his needs.
Spurred on by his frustration, Gormley and a small team of 45 set about creating a financial company with a fresh look.
Virgin Direct is built on a simple set of values. Says Gormley: 'For customers, our aim is to be the one company that sets the standard for integrity and service, saving customers time, hassle and money. For our shareholders, Virgin Direct looks to repay the trust and money they have invested by building a company they can be proud of and which earns them a fair return on their investment.' As for the 800 employees now tightly packed into Virgin Direct's Norwich premises, the company wants them to have fun, job satisfaction and to earn a living which reflects the difference they can make to people's lives.
Virgin Direct offers savings, investments, personal pensions, insurance and mortgages through a partnership with Royal Bank of Scotland. 'When we started we didn't have an established reputation or billions in funds under management,' explains Gormley. 'What we did have was the Virgin name and a view that we could do things differently for customers. Our aim is to make everything as easy and painless as possible.' The Virgin Direct organisation has been built around simple processes, jargon-free, easy-to-read literature and ease of contact with its 300,000 customers.
When customers said they wanted to speak to people on the telephone rather than an interactive voice response, Virgin Direct decided to offer both options. The company's call centre was voted European Call Centre of the Year in the 1998 BPS Teleperformance awards.
Customers receive Virgin Direct's company newsletter, Upfront, twice a year and are informed of any unusual events by letter. When, for example, the UK stock market fell suddenly earlier this year, Virgin Direct pre-empted customer concern by immediately sending its PEP investors a letter addressing the issue.
Key to Virgin Direct's success in building customer relationships (99.4% of customers described service as excellent or good in a recent survey) is its 'no pester promise': call centre staff don't try to convince customers to buy other products. However, the company is committed to improving customers' understanding of financial products and in offering straightforward alternatives. The Virgin One account replaces a customer's mortgage, current and savings accounts, credit cards and personal loans with one account and was devised in response to customer demand. The company offers existing customers advice in sorting out their finances through its free Money Managers service. To dispel confusion concerning ISAs, Virgin Direct issued 400,000 free copies of Richard Branson's guide to PEPs, TESSAs and ISAs and also published a guide to ISAs in association with the Daily Mail.
In addition to straightforward products, timely information and good value, Virgin Direct also offers the services of young (average age 25), enthusiastic and knowledgeable staff. 'We train our staff to high levels, so when recruiting we look for people with personality and potential rather than existing skills,' says managing director Simon Clegg. Virgin Direct shares the dynamic culture of other Virgin companies and is a relaxed place to work. Staff benefit from a free restaurant and incentive schemes.
To win this award, Virgin Direct beat off strong opposition from three more-established organisations who have transformed their structures and processes in the quest for service excellence: the Co-operative Bank's personal customer operations, Halifax retail network and the West Bromwich Building Society. To begin as Virgin Direct did with a blank sheet of paper is arguably an easier task. Complacency, however, is not a company failing. 'We believe we have until the end of this year to build a position for ourselves,' insists Gormley. 'The rest of the industry is fighting back.'
- Constantly challenge the way things are done
- Give customers a single point of contact
- Use direct communication to build relationships
- Make products easy to understand
- Collect customer feedback at every opportunity.